Abstract

Palm oil is one of the commodities produced in rural Nigeria whose consumption daily in the human diet and use as an industrial raw material have increased its potentials for income generation and poverty alleviation. This study examined the contribution of palm oil production to income generation among 120 small-scale farmers selected from the farming communities in Ekiti State, Nigeria. Responses to a structured interview schedule were analyzed using frequency counts and percentages while profitability was determined with data provided on costs and revenue. Palm oil producers were mainly middle-aged married females with low literacy level and operated on small-scale farms (< 2 ha) grown mainly to Dura variety of oil palm. Most farmers used modern processing methods (motorized hydraulic pressers and combined hydraulic pressers and nut crackers) and incurred ₦3,000 transportation cost and ₦5,000-10,000 labour cost per processing session. The Gross Margin averaged ₦69,600 between 2008 and 2012 while processing cost was ₦0.57 for every ₦1.00 return. The major challenges are labour shortage and yield variation due to climate change while high costs of labour and processing equipment affected profitability. Farmers should form cooperatives to: pool resources and acquire modern equipment so as to increase scale of operations, reduce extraction cost and enhance revenue; access credit; benefit from training on the use of modern processing machines and education on adaptation to climate change.